Geopolitical Tensions Fuel Gold Rally

Gold prices (XAUUS) continue their ascent, buoyed by escalating geopolitical tensions in the Middle East. The recent drone strikes between Iran and Israel have heightened investor anxiety, driving demand for safe-haven assets like gold. The potential for a wider conflict involving regional powers and the US further strengthens gold’s appeal. 

However, the US dollar’s strength, fuelled by robust economic data like stronger-than-expected retail sales, acts as a counterweight to gold’s rise. The Federal Reserve’s hawkish stance on maintaining higher interest rates to combat inflation could temper gold’s gains in the near future. Investors are awaiting Jerome Powell’s speech and upcoming economic data releases for further cues on the Fed’s monetary policy direction. 

Technical Analysis 

The 4-hour chart shows that gold is trading near its all-time high of $2,431.47, currently positioned at $2,371.85. The price action sits comfortably above the ascending 20-SMA (green line), 50-SMA (blue line), and 100-SMA (orange line), indicating a strong bullish trend. 

A break above the all-time high of $2,431.47 could occur if the 20-SMA provides support. Significant volume on a breakout could strengthen the bullish momentum, targeting the 23.60% Fibonacci extension level ($2,470.16) and 38.20% Fibonacci extension level ($2,494.09). A correction below the 20-SMA and 50-SMA could see $2,330.71 as initial support. A sustained move below this level could bring $2,266.02 into play for the bears. 


The geopolitical turmoil in the Middle East is the primary driver behind gold’s current rally. The technical analysis on the 4-hour timeframe suggests a bullish bias with a potential test of the record highs in the near future. However, the US economic data and the Fed’s policy decisions will be crucial factors to watch for any potential reversal in the uptrend. 

Sources: TradingView, Trading Economics, Reuters. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.